SpaceX Stock Stays in a Bear Market After the Midterm Elections as Analysts Stay Upbeat

Space Exploration Technologies (NASDAQ:SPCX) stock has been hammered after the midterm elections, in which Democrats won by a large margin. It dropped to $120.4 on Thursday, its lowest level since August 7 and 46% from its all-time high, with analysts maintaining their upbeat outlook for the shares. 

SpaceX Stock Dropped After the US Midterms

Elon Musk’s SpaceX has become one of the top casualties of the US midterm elections, with analysts and investors expecting it to face some major headwinds in a Congress controlled by Democrats.

One of the key aspects is that the company will be investigated for the recent decision to throttle its Starshield product in Ukraine. Democrats will want to know what happened, as the move likely led to deaths in Ukraine.

Meanwhile, the company is also exposed to the data center industry, which is facing pushback in the United States. In a statement, Dan Ives, a prominent analyst, said the industry could face major hurdles over the next two years. He pointed to Governor Gina Hinojosa, who has pledged to impose a moratorium on data centers.

SpaceX has become one of the biggest players in the data center industry. It recently raised $40 billion to invest in the data center industry. It has also inked large deals with companies like Alphabet (NASDAQ:GOOG), Anthropic, and Reflection AI. The business also become its biggest revenue earner.

At the same time, there is a likelihood that Democrats will oppose a potential deal to merge SpaceX and Tesla (NASDAQ:TSLA).

Analysts are Optimistic About SPCX Stock

Top analysts have maintained their bullish outlook for SpaceX shares despite the new challenges. Douglas Harned, a Bernstein analyst, maintained a buy rating and a target of $267. 

Philip Securities hiked the rating from a strong sell to a strong buy, while Bank of America hiked the target from $235 to $275. Other top analysts who have hiked the target are Piper Sandler, Goldman Sachs, and Mizuho.

Despite the challenges, SpaceX’s business is doing well. Its revenue rose by 161% in the third quarter to $14.6 billion, with its net income rising to $4.4 billion. Most of the revenue came from its AI business, which made $7.5 billion. Its connectivity and space businesses made over $5.2 billion and $1.7 billion, respectively. 

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